ASIA CREDIT CLOSE: Asian credits little changed; new issues rally

“The market has taken a breather after a recent rally, but sentiment remained constructive,” said a Hong Kong-based trader.

Long-dated notes of Chinese state-owned enterprises were barely changed today, after having tightened 7bp-8bp in the past two days on news of China’s upcoming offering of US$2bn sovereign US dollar bonds.

Natixis said in a research note that the Chinese government will issue more offshore US dollar sovereign bonds given the increasingly cheap offshore funding.

However, more importantly, it will help to create a benchmark, which will eventually help Chinese corporates reduce their offshore funding costs, Natixis has said.

The iTraxx Asia investment-grade index was 1bp tighter at 76bp/77bp.

New issues priced yesterday, from investment-grade to high yield and even Dim Sum bonds all traded well.

United Overseas Bank’s US$650m 3.875% perpetual non-call six AT1s traded up to 100.35/100.45.